Farm Credit Canada v. K & R Poultry Ltd. et al., (2011) 387 Sask.R. 35 (QB)

• Judge: Rothery, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: August 30, 2011
• Jurisdiction: Saskatchewan
• Citations: (2011), 387 Sask.R. 35 (QB);2011 SKQB 316

Farm Credit v. K&R Poultry Ltd. (2011), 387 Sask.R. 35 (QB)

MLB headnote and full text

Temp. Cite: [2011] Sask.R. TBEd. SE.027

Farm Credit Canada (applicant) v. K & R Poultry Ltd., Poultry 2.0 Farms Ltd., Superior Poultry Processors Ltd., Hallmark Poultry Processors Ltd., SSC Ventures (No. 57) Ltd., Dalmeny Road Poultry Ltd., MacPherson Leslie & Tyerman LLP, Affinity Credit Union, Rycom Trading Ltd. and Commodity Specialists Company (respondents)

(2011 Q.B. No. 657; 2011 SKQB 316)

Indexed As: Farm Credit Canada v. K & R Poultry Ltd. et al.

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Rothery, J.

August 30, 2011.

Summary:

At issue on this application was whether the beneficiary of a trust was entitled to $207,806.97 (including accrued interest after August 22, 2011) of the funds held in trust after the sale of Saskatchewan broiler chicken quota, or whether Farm Credit Canada (FCC) was entitled to those funds as the secured creditor of Dalmeny Road Poultry Ltd.

The Saskatchewan Court of Queen's Bench held that FCC was entitled to the funds.

Personal Property - Topic 6209.1

Security interests - Priorities - After acquired property - At issue on this application was whether K & R Poultry Ltd. (K & R), the beneficiary of a trust, was entitled to $207,806.97 (including accrued interest after August 22, 2011) of the funds held in trust after the sale of a Saskatchewan broiler chicken quota, or whether Farm Credit Canada (FCC) was entitled to those funds as the secured creditor of Dalmeny Road Poultry Ltd. (Dalmeny) - The Saskatchewan Court of Queen's Bench held that FCC was entitled to the funds - FCC had a PPSA interest in Dalmeny's present and after-acquired property and no notice of the trust - There was no evidence of what enquiries FCC could have made or did make of Chicken Farmers of Saskatchewan (CFS) prior to June 5, 2009 when FCC advanced $200,000 in loan proceeds to Dalmeny - However, if enquiries had been made thereafter, FCC would have learned from CFS that K & R had no interest in the quota, which was after-acquired property - K & R could not now allege that FCC had constructive notice of a trust that was hidden from CFS to circumvent its regulatory requirements.

Cases Noticed:

Radius Credit Union Ltd. v. Royal Bank of Canada (2009), 324 Sask.R. 191; 451 W.A.C. 191; 2009 SKCA 36, affd. [2010] 3 S.C.R. 38; 407 N.R. 267; 362 Sask.R. 45; 500 W.A.C. 45; 2010 SCC 48, refd to. [paras. 14, 15].

Authors and Works Noticed:

Cuming, Ronald C.C., and Wood, Roderick J., Saskatchewan and Manitoba Personal Property Security Acts Handbook (1994), p. 126 [para. 26].

McGee, John, Ed., Snell's Equity (31st Ed. 2005), p. 71-73 [para. 21].

Counsel:

J.A. Hesje, Q.C., for Farm Credit Canada;

M.M. Tobin, for K & R Poultry Ltd.;

S.M. Sinclair, for Superior Poultry Processors, Ltd., Hallmark Poultry Processors Ltd. and Poultry 2.0 Farms Ltd.;

D.G. Orr, for SSC Ventures (No. 57) Ltd.

This application was heard by Rothery, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon, who delivered the following fiat on August 30, 2011.